New accounting standards raise P&O’s liabilities

New accounting standards raise P&O’s liabilities    The adoption of International Financial Reporting Standards (IFRS) by London-based Peninsular & Oriental, parent company of P&O Ports, will result in raising its pension fund liabilities, the company said.
   P&O has adopted the new accounting standards, required for public companies, since Jan. 1. The port group has also published restated financial statements for 2004 under the IFRS standards, replacing the U.K. Generally Accepted Accounting Practice standards.
   As a result of the change, P&O raised its pension liability by '310 million ($564 million) in its restated end-of-year 2004 accounts, and lowered its net assets from '1 billion ($1.8 billion) to '759 million ($1.4 billion).
   Yet, applying the new accounting standards, “underlying pre-tax profit” for 2004 increased from '170 million ($309 million) to '182 million ($331 million), the group said.
   “The most significant changes for P&O from adopting IFRS relate to the balance sheet, and in particular to pensions,” said Nick Luff, chief financial officer of P&O.
   He said reported underlying earnings were not expected to change significantly.
   “The changes are purely presentational and the application of IFRS will not change our strategy or our trading cash flows,” Luff added.